From the end of Soviet Communism
until the invasion of Ukraine, we in the West spent 30 years like sleepwalkers
in a dreamland, entertaining pleasant fantasies about the world as we wished it
to be. Now that reality has rudely awakened us in Europe, it is time to take
inventory of our other geopolitical illusions—all around the globe.

In the Korean peninsula, the past
generation has seen endless wishful thinking about reunification. Intellectual
and political leaders in the South behaved as if the continuing division of
Korea were a costless proposition. Practical planning for reunification could always
be deferred. Even when they did bother to think about reunification, some
serious people imagined fairytale endings, where the North somehow reformed and
enriched itself before offering its hand in marriage as a suitable partner for
the South.

Let’s now and finally discard all those
comforting delusions, and instead focus on reunification as if it actually
mattered to the lives of real people—for it most assuredly does.

We can begin with some economic questions
about a Korean re-unification.

First of all: No one should ever forget
that the continuing division of Korea comes at a very real price. It is being
paid every day by North Korea’s captive population. They suffer a human rights
nightmare, an oppression exquisitely perfected under three generations of
totalitarian rule by the Kim dynasty. Living standards in the immiserated North
are falling ever further behind those in the affluent South—and that gap will
continue to widen so long as the Democratic People’s Republic of Korea (DPRK)
is in charge up there.

South Koreans may be seriously mistaken
to assume that continuing division of the peninsula comes at no cost to them. Why
do they think Pyongyang is amassing its nuclear arsenal, and building all those
missiles? The North has a game-plan: and it does not include an indefinite
peaceful partition. Those who price the North Korean threat around zero may be
making a fateful economic miscalculation. The longer unification is postponed,
the greater the potential cost of that particular reckoning.

Secondly, South Korea and her allies
need to undertake the hard intellectual work to maximize the odds of a
successful Korean reunification. This specifically includes policy planning in
the realm of economics. Better understanding the many economic issues entailed
in an integration of North and South should not be regarded as “thinking the
unthinkable.”

A successful economic transition to a
post-DPRK Korea will require both an unflinching eye and a humanistic vision: courage
to recognize unwelcome truths, but also unwavering commitment to uphold the constitutional
rights and progressively improve the lot of the Republic of Korea’s (ROK’s)
newest citizens.

Since the Kim family regime continues
to conceal the North’s true social and economic situation from outsiders, we
cannot make a careful assessment of current conditions. But we can start with
some educated guesses.

For one thing, given the DPRK’s
severe technological backwardness and its woeful structural distortions, it is
all too likely that the North’s capital stock is more or less worthless today
in market terms, except perhaps for its scrap value. Almost all of the
territory’s basic infrastructure—in transport, communications, and industry—will
likely have to be torn down and rebuilt. But remember, that far-reaching
reconstruction will also bring far-reaching economic promise: The North could
end up with a newer and more productive plant structure than the South!
Furthermore, with a businesslike approach under an auspicious business climate,
such long-term projects ought to generate high rates of return: and thus could even
ultimately pay for themselves.

For another, North Korea’s human
capital—the health, nutrition, education and skills of its people—may now be painfully
far behind that of the compatriots in the South. In a market system, such lags
portend immense gaps in wages and earnings between most Northerners and most
Southerners, at least initially. Even so: Given the miserable state of daily
life in the DPRK today, the overwhelming majority of Northerners could expect
not only a jump in living standards from unification, but a tremendous jump. And
with attentive education and training—not only for the North’s rising youth
cohorts, but for its working adults—productivity, and thus incomes, should
subsequently start to equalize between the formerly divided populations.

If South Korea and her foreign allies
and friends wish to make the peninsula’s eventual reunification an economic
success, they can get to work today. We do not know when reunification will
beckon, but there may be no time to lose.

A strong and credible international
security architecture for the Korean peninsula will embed a united Korea in the
Western family of nations and the global market system for trade and finance.
Such a geopolitical commitment will not only reduce military and political
uncertainties, but economic ones. To date the US-ROK alliance has served the
world well, and there is a powerful argument for preserving it even after
re-unification, for Northeast Asia looks to be a dangerous neighborhood even
after the North Korean threat is finally gone. And if we look to the future we
should also recognize the still unrealized promise of multilateral security
networks for Asia—just look how those are working in Europe, in their current
crisis. Crafting a strong multilateral security alliance binding Asia’s Western
democracies is a great task, and will be a triumph of statesmanship.

Finally, the most important
preparations for economic reunification that South Koreans can make at home
today lie in ensuring the continuing success of their own economy. Over the
past 20 years the ROK’s wealth has quadrupled—greater wealth means more options
when reunification comes. A dynamic, entrepreneurial, technologically
pioneering economy will be more capable of coping with the many challenges that
integration with the North will inevitably pose. There is an urgency to continuing
economic and legal reforms—including strengthening the domestic rule of law. These
will stand the ROK in good stead today—all the more tomorrow, in welcoming the
new citizens to a land not only of opportunity but also of fair play.

Nicholas Eberstadt holds the Wendt Chair in Political Economy at the American Enterprise Institute. These remarks were prepared for the Global Peace Foundation’s “International Forum on One Korea” in April 2022.

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