SOUTH KOREA: Even South Koreans who support reunification know it would cripple them, writes Anthony Faiola in Seoul.
Clusters of Korean War veterans were gathered at their favourite shady spot in downtown Seoul on a recent afternoon, arguing about a hot topic among South Koreans - the massive cost of reunification with North Korea.
The issue has moved to the national forefront after the South Korean government this month outlined a multibillion-dollar electricity assistance proposal to the North in an offer seen as a key reason North Korea agreed to return to international disarmament talks which reconvened in Beijing yesterday.
Amounting to the most expansive direct aid ever proposed from the capitalist South to the communist North, the electricity package has been described as the first part of a North Korean Marshall plan. Aid could eventually bring new or improved South Korean-funded harbours, airports and motorways to North Korea if it abandons its nuclear weapons program.
While analysts and diplomats say the plan could help persuade North Korea to disarm, it is also an example of how expensive the bill will be if the South and the North are to achieve national reunification. The electricity package alone would cost at least $1.4 billion (€1.16 billion) in new infrastructure and an additional $1 billion each year starting in 2008 as 2,000 megawatts of power are conducted across the heavily fortified border.
Some of the veterans in the downtown park shouted that the aid package was "too expensive!" and "never for them!" But most agreed with Lee Jong-in (71), who once fought his northern brothers on the battlefield. Rather than an expensive inducement, he said, the offer amounts to an essential investment in the future of Korean unification.
"Like them or not, North Koreans are our brothers, and one day we will unify the way East and West Germany did," said Lee, a retired school teacher. "Just like the West Germans, we will bear a financial burden, but the economic differences between North and South are now too great. They are very poor, but if we help them to modernise, we can reduce our unification burden down the line. We need to try to balance out the differences between us before we become one."
Here on the Cold War's last frontier, many South Koreans see the decision as between paying now or paying more later. One poll by the firm TNS Korea, sponsored by the governing Uri Party, showed that 59 per cent of respondents supported the electricity plan and about 37 per cent opposed it.
South Koreans have been highly focused recently on closer ties with the North. A number of new factories and hotels have been built there. Kim Jong Il, the North Korean leader, this month met Hyun Jeong-eun, the head of South Korea's Hyundai Group, and agreed to grant the company rights to bring South Korean tourists to the historic city of Kaesong and the North's sacred Mount Paektu as soon as late August. Talks are also underway to allow stopovers in the usually isolated North Korean capital, Pyongyang.
South and North Korean actors and singers are performing together in commercials and concerts; artists and scientists are holding joint summits. Service on an almost completed 15-mile rail link across the North-South border is expected to begin in September. Moreover, this month, the two Koreas established a fiber-optic cable link to allow video conferencing for family members separated after the war.
Despite the blossoming of brotherly love, however, even those South Koreans who support unification say that if it happened now, the cost would cripple them. South Korea is the world's 11th-largest economy and home to major car makers and international electronics firms.
When East and West Germany reunited, South Korean scholars note, the East had one-fourth the population of the West and its economy was one-third the size. By comparison, North Korea has nearly half as many people as South Korea, but its failed economy amounts to only 7 per cent of that of the South. South Korean experts, therefore, say the economic shock from reunification would be far greater. One recent study by the Rand Corporation, a US-based research firm, estimated that a sudden reunification of North and South could cost as much as $670 billion.
"So we need time - we need time to help North Korea improve its infrastructure and narrow the gap with the South," said Kim Young-yoon, a director at the Korea Institute for National Unification. "The electricity proposal is a step in that direction - it's a long-term investment to bring down the eventual costs of a unified Korea."
The South Korean government has said that its electricity offer is meant to address North Korea's power shortage, following the suspension of work on two light-water nuclear reactors that were part of a 1994 agreement between the North and the Clinton administration. The Bush administration abandoned the project after the Pyongyang government admitted to having violated the agreement by continuing its nuclear weapons research.
The amount to be spent on the electricity proposal, government officials said, would be offset, at least initially, by shifting $2.4 billion that South Korea had pledged for the reactors toward the non-nuclear power assistance. Construction could start this year - if agreement is reached - with power transmission to begin by 2008, assuming that the North has dismantled its nuclear programs by then.